Stock futures decline as gold and silver surge following concerns about the Fed’s independence sparked by the Powell investigation

U.S. Stock Futures Drop Amid Powell Investigation

U.S. stock futures experienced significant declines on Sunday evening following Federal Reserve Chair Jerome Powell’s confirmation that he is the subject of an inquiry regarding statements he made last June about renovations at Federal Reserve facilities.

According to a report, news of the investigation and Powell’s response unsettled investors, reigniting concerns that former President Donald Trump’s years of pressuring the Fed could now escalate into a direct challenge to its autonomy.

Market Reaction

• Futures linked to the Nasdaq 100 led the downturn, dropping roughly 0.8% as technology shares, which are sensitive to interest rate changes, saw the steepest losses.
• S&P 500 futures slipped about 0.5%.
• Dow Jones Industrial Average futures fell by approximately 0.4% in late trading.

Investors turned to traditional safe-haven assets. Gold futures climbed 1.7% to around $4,578 per ounce, and silver surged over 4%, signaling renewed interest in hedging against political and financial uncertainty. Meanwhile, the U.S. dollar weakened slightly against major currencies such as the Swiss franc and Japanese yen.

Powell Responds to Political Pressure

After years of restraint in the face of Trump’s repeated public criticism and threats, Powell issued an unusually direct statement. He stated that, “No one—not even the Federal Reserve Chair—is above the law,” but emphasized that the investigation should be viewed in light of ongoing pressure and threats from the administration.

Powell asserted, “This latest threat is not truly about my testimony last June or the renovations at the Fed… These are merely excuses. The real issue is that criminal charges are being considered because the Federal Reserve sets interest rates based on what we believe best serves the public, rather than following the President’s wishes.”

Concerns Over Fed Independence

Economists caution that if the executive branch succeeds in undermining the Fed’s independence, it could trigger a “self-fulfilling prophecy” of persistent inflation.

As Oxford Economics recently observed, any perceived weakening of the Fed’s autonomy could quickly ripple through financial markets and ultimately drive up borrowing costs for the very businesses the administration aims to help by keeping rates low.

Back in July, when Trump publicly threatened to dismiss Powell, Deutsche Bank warned that such actions could cause severe market turmoil.

“Both the currency and bond markets could collapse,” the bank cautioned, pointing to increased risks of inflation and financial instability. “There is clear empirical and academic evidence showing the dangers of losing central bank independence.”

Industry Leaders Voice Alarm

Wall Street leaders have echoed these warnings. Brian Moynihan, CEO of Bank of America, recently stated that undermining the Fed’s independence would have serious repercussions.

“If the Federal Reserve loses its independence, the market will respond harshly,” Moynihan warned.

This article was originally published on Fortune.com.